Activity

Cryptocurrency exchange platforms are a great way to start trading cryptocurrency.

The number of cryptocurrencies available is increasing and most cryptocurrency exchanges are now able to offer a wide range of coins, tokens or altcoins. These digital assets are also available for trading in other cryptocurrencies like Bitcoin and Ethereum.

It can be difficult to choose the right exchange for you, given all of the options available.

How Centralized Crypto Exchanges Work

It is very easy to purchase your cryptocurrency once your money has been deposited on a CeX. The CeX often comes with a built in crypto wallet, which you can use for your cryptocurrencies. You also get the option of withdrawing your crypto assets to an external wallet.

Every centralized exchange features a different internal architecture; however, most centralized exchanges operate with order books that match buy and sell orders.

A CeX’s order book lists all orders (buy and sell) from users looking to trade cryptocurrencies on that particular exchange with prices ranging from the best offers, best bid, high, low, etc.

Once an order is matched by a counter-party (i.e., a buyer or seller), the order will be taken by the platform operators, who match the orders and provide liquidity, thus enabling an efficient and fast trade execution at the best price.

How Decentralized Crypto Exchanges Work

Although decentralized exchanges can be very easy to use, there are some learning curves. These exchanges let you buy cryptocurrencies from other users using only the blockchain as an intermediary.

DeXs are great for people who want to exchange cryptocurrencies without having to go through a third party and trusting a central entity with the safety of their funds.

There are two categories of decentralized changes: order-book-based decentralized exchanges and automated market-making DeXs.

Decentralized, order-book-based exchanges work in the same manner as centralized exchanges. They list all orders on an online order book and price range from the lowest asking prices to the highest bids. They use a decentralized framework for matching and settling transactions. Automated market-making DeXs don’t use order books. Smart contracts are used to match and settle orders between users’ wallets and smart contracts. AMM DeXs also outsource liquidity from platform users.

More details about Buy Ethereum take a look at this useful net page